SERVICEMEMBERS CIVIL RELIEF ACT GUIDE

PURPOSE

This guide discusses matters base legal office staffs should address in advising
personnel concerning the Servicemembers Civil Relief Act (SCRA). SCRA provides
temporary suspension of judicial and administrative proceedings and transactions
involving civil liabilities of members whose military service affects their
ability to meet their civil obligations. Information on SCRA is particularly
applicable for those who have recently come on active duty or are preparing for
a long-term deployment that may impact their ability to meet their financial
commitments entered into at their present location.

Specific subjects include: suspension of judicial and administrative hearings of
civil suits against members; limitations for individuals seeking to enforce
civil liabilities of members concerning leases, installment contracts,
mortgages, and liens; members’ rights with regard to suspension of life
insurance premiums, public land rights, taxes, and business obligations; and,
default judgments entered against members in certain circumstances.

SCRA was signed into law on 19 December 2003, updating and superseding the
Soldiers’ and Sailors’ Civil Relief Act of 1940. SCRA requires the Secretary of
Defense to provide notification of the benefits under SCRA to its members. Once
such notice has been promulgated, by the Department of Defense and/or the United
States Air Force, it should be consulted in conjunction with this guidance.

COVERAGE UNDER THE ACT

Members covered by SCRA include all members on Federal active duty, including
regular members of the Armed Forces (Army, Navy, Air Force, Marine Corps and
Coast Guard); Reserve, National Guard and Air National Guard personnel who have
been activated and are on Federal active duty (whether as volunteers or as a
result of involuntary activation); inductees serving with the armed forces;
Public Health Service and National Oceanic and Atmospheric Administration
Officers detailed for duty with the armed forces; persons who are training or
studying under the supervision of the United States preliminary to induction;
and National Guard and Air National Guard personnel on duty for training or
other duty authorized by 32 U.S.C. §502(f) at the request of the President, for
or in support of an operation during a war or national emergency declared by the
President or Congress.

In
addition, certain benefits are extended to dependents of members and all
benefits are extended to citizens of the United States serving with the armed
forces of the U. S. allies during the time of war.

Also, courts and administrative agencies may extend a stay, postponement, or
suspension and may vacate or set-aside a judgment, when done for a member
pursuant to SCRA, with regard to a surety, guarantor, endorser, accommodation
maker, co-maker, or other person who is or may be primarily or secondarily
subject to the obligation or liability.

SCRA does not cover or protect members
of Reserve, National Guard and Air National Guard components not on active duty;
retired personnel; and National Guard and Air National Guard troops called to
duty under Title 32 U.S.C. state orders, EXCEPT for those troops called up under
32 U.S.C. §502(f) for purposes of responding to a national emergency declared by
the President and supported by Federal funds.
Note: ANG personnel on Title 10 orders are covered by the
SCRA.

CIVIL SUITS AND ADMINISTRATIVE
PROCEEDINGS IN GENERAL

Stays

A
party (defendant or plaintiff) in a suit or administrative proceeding who is on
active duty or has been released from active duty in the previous 90 days, and
has received notice of such proceeding, may make at any time before final
judgment, an application to the court or administrative body for a stay of the
proceeding. Such application must include:

a letter or other communication
setting forth facts stating the manner in which current military duty
requirements materially affect the member’s ability to appear and stating a
date when the member will be available to appear; and,

a letter or other communication
from the member’s commanding officer stating that the member’s current
military duty prevents appearance and that military leave is not authorized
for the member at the time of the letter.

Upon such application the court or administrative body must stay the action for
a period of not less than 90 days. A party who is granted such a stay may apply
(at the time of the initial application or at a later time) for an additional
stay based on continuing material affect of military duty on the member’s
ability to appear. The same information required for the initial application is
required with the application for an additional stay. The court or
administrative body may, sua sponte or upon such an application, stay the action
for an additional period of not less than 90 days.

If
the court or administrative body refuses to grant the additional stay, the court
must appoint counsel to represent the member in the action or proceeding.

An
application for a stay does not constitute an appearance for jurisdictional
purposes and does not constitute a waiver of any substantive or procedural
defense.

Application cannot be made for a general stay in an action covered by the
protections for eviction and distress discussed below.

No
fine and/or penalties under contracts may be imposed for failure to comply with
the contract during the stay.

Default Judgments

For
any civil action or proceeding in which the defendant does not appear, the
plaintiff must file an affidavit stating whether or not they have evidence that
the defendant is on active duty.

A
person who knowingly makes a false affidavit or other verification document
shall be fined up to $100,000 or imprisoned for up to one year.

If it appears that the defendant is on
active duty, the court or administrative body may not enter judgment
against the defendant until it has appointed an attorney to represent the
member.

Where the defendant is on active duty, the court shall grant a stay of
proceedings for a minimum period of 90 days upon application of counsel or sua
sponte if the court determines that: 1) there may be a defense to the action and
a defense cannot be presented without the presence of the defendant; or 2) after
due diligence counsel has been unable to contact the defendant or otherwise
determine if a meritorious defense exists. (Note: the requirements for
application of a stay described above do not apply in this case).

If
based on the affidavits filed the court or administrative body cannot determine
if the member is on active duty, the court or administrative body may require
the plaintiff to file a bond to indemnify the defendant against any damages that
the member may suffer if the default judgment should later be set aside in whole
or in part.

If
a default judgment is entered against a member on active duty (or within 60 days
after termination of or release from active duty), an application can be made
within 90 days of release from or termination of active duty to the court by the
member or on behalf of the member requesting the court or administrative body
set aside or vacate the default judgment. Upon such application, the court or
administrative body must reopen the judgment for the purpose of allowing the
member to defend the action if it appears that: 1) the member was materially
affected by reason of the military service in making a defense to the action;
and 2) the member has a meritorious
or legal defense to the action.

Note:
Vacating, setting aside or reversing a default judgment because of any of the
provisions of SCRA shall not impair any right or title acquired by any bona fide
purchaser for value under such judgment.

Statute of Limitations

During a period of active duty, time
prescriptive statutes (both for and against the member) are tolled and do not
run, regardlessof whether or not the member’s service has materially
affected compliance, and regardless of whether the cause of action arose before
or during the period of active duty service.

During a period of active duty, the period provided by law for the redemption of
real property sold or forfeited to enforce an obligation, tax, or assessment
shall not run.

These statute of limitations rules do not apply to time limitations established
under federal internal revenue laws.

SPECIFIC ACTIONS

Note:
Upon application to a court, a member’s dependent is entitled to the
protections listed in this section if the dependent’s ability to comply with an
obligation is materially affected by reason of the member’s military service.

Rents and Leases

Evictions and Distress - A
landlord may not evict a member on active duty or the dependents of a member on
active duty from premises occupied for dwelling purposes for which the rent does
not exceed $2,400 per month for 2003, which amount is adjusted for inflation for
subsequent years, or subject such residence to a distress except by court order.
This rule applies regardless of whether quarters were rented before or after
entry onto active duty.

A
landlord who knowingly takes action in contravention of this rule or attempts to
do so shall be fined up to $100,000 or imprisoned for up to one year.

Where a landlord applies to a court for an order for eviction or distress, the
court may sua sponte and must, if a request is made by or on behalf of a member
showing that the ability to pay the agreed rent is materially affected by
military service, stay the proceedings for an equitable period (90 days is the
suggested time period); or adjust the obligation under the lease. Where a stay
is granted the court may grant appropriate equitable relief to the landlord.
(Note: the application for a general stay of proceedings described above is not
applicable in this type of proceeding).

In
accordance with an order issued by a court in such a proceeding, DFAS must make
an allotment from the pay of a member to satisfy the terms of such order,
subject to DOD, DFAS, and AF regulations establishing the maximum amount of pay
that may be allotted under this rule.

Termination - Leases of Premises -A member may terminate a lease at
his or her will for premises occupied or intended to be occupied as a residence
by the member or the member’s dependents or for professional, business,
agricultural, or similar purpose where:

the lease is executed by or on
behalf of a person who thereafter and during the term of the lease enters
active duty; or,

a member, while on active duty
executes the lease and thereafter receives military orders to PCS or to
deploy with a military unit for a period of not less than 90 days.

Termination - Motor Vehicle Lease
-A member may terminate a motor vehicle lease for a vehicle used, or
intended to be used, by the member or the member’s dependents for personal or
business transportation if:

the
lease is executed by or on behalf of a person who thereafter and during the term
of the lease enters active duty under orders for a period of not less than 180
days (or receives orders extending a period of active duty to at least 180 days
without a break in service); or,

a
member, while on active duty executes the lease and thereafter receives military
orders to PCS outside of the continental United States or to deploy with a
military unit for a period of not less than 180 days.

Termination of either a real property or motor vehicle lease must be made by
delivering (by hand, by carrier, or by return receipt requested mail) a written
notice of the termination with a copy of the member’s orders to the lessor or
the lessor’s agent; and in the case of a motor vehicle by return of the vehicle
not later than 15 days after the date of delivery of the written notice.

Termination of a lease for premises is effective:

for monthly leases: 30 days
after the first date on which the next rental payment is due after the date
of delivery of the notice of termination; and,

for other leases: on the last
day of the month following the month in which the notice is delivered.

Termination of a lease for a motor vehicle is effective on the day on which the
notice of termination is delivered or the vehicle is returned to the lessor,
whichever is later.

The
member is responsible to pay all lease payments due to the date of termination
on a prorated basis and rent paid in advance must be refunded to the member. In
the case of the lease of a motor vehicle, the lessor may not impose an early
termination charge, but all other charges in accordance with the terms of the
lease must be paid by the member.

A
person who knowingly takes action in contravention of this rule or attempts to
do so shall be fined up to $100,000 or imprisoned for up to one year.

Installment Contracts

If
a member contracts to purchase, lease or for bailment of real or personal
property (including a motor vehicle) and pays at least a deposit or one
installment payment on the contract before coming onto active duty, the contract
may not be rescinded or terminated, nor the property repossessed for breach of
the contract, without a court order.

In
a hearing concerning such a contract, a court:

may order repayment to the
member of all or part of the prior installments or deposits as a condition
of terminating the contract and resuming possession of the property;

may sua sponte and must upon
application by a member when the member’s ability to comply with the
contract is materially affected by military service, stay the proceedings
for an equitable period of time; or,

may make other disposition as
is equitable to preserve the interests of the parties.

A
person who knowingly takes action in contravention of this rule or attempts to
do so shall be fined up to $100,000 or imprisoned for up to one year.

Mortgages and Liens

If
a member is obligated on real or personal property, secured by a mortgage, trust
deed, or other similar security and the obligation originated before the period
of active duty and an action is filed during or within 90 days after the period
of active duty to enforce the obligation, a court may sua sponte after a hearing
and must upon application by a member when the member’s ability to comply with
the obligation is materially affected by military service:

stay the proceedings for an
equitable period of time; or,

adjust the obligation to
preserve the interests of all parties.

A
sale, foreclosure, or seizure of such secured property for a breach of the
member’s obligation shall not be valid if made during, or within 90 days after,
the member’s period of active duty, unless a court order is granted before such
action.

A
person who knowingly takes action in contravention of this rule or attempts to
do so shall be fined up to $100,000 or imprisoned for up to one year.

Storage Liens

A
person holding a lien for storage, repair, cleaning, or other purpose on the
property or effects of a member may not, during any period of active duty and
for 90 days thereafter, foreclose or enforce any lien on such property or
effects without a court order granted before foreclosure or enforcement.

A
person who knowingly takes action in contravention of this rule or attempts to
do so shall be fined up to $100,000 or imprisoned for up to one year.

Stayed Actions for Personal Property

When a court orders a stay in a proceeding to foreclose a mortgage on or to
repossess personal property, or to rescind or terminate a contract for the
purchase of personal property, the court may order an appraisal, and if undue
hardship to the member’s dependents will not result, the court may order that
the amount of the member’s equity in the property be paid to the member or the
member’s dependents, as a condition of foreclosing the mortgage, repossessing
the property, or rescinding or terminating the contract.

OTHER OBLIGATION AND LIABILITY
RELIEF

Anticipatory Relief

A
member may apply to a court for relief during a period of active duty or within
180 after release from active duty, from any obligation or liability incurred
before the member entered active duty or any tax liability or assessment that
became due before or during the member’s period of active duty.

The
court, after appropriate notice and hearing, if it determines that the ability
of the member to comply with the terms of an obligation or liability or pay a
tax due has been materially affected by reason of military service, may:

stay an enforcement of an
obligation payable in installments for purchase of real estate secured by a
mortgage, while the member is on active duty, or from the date of release
from active duty if application for relief is made after release, for a
period equal to the remaining life of the contract plus a period of time
equal to period of active duty and subject to payment of the balance on the
contract during the stay period; and,

stay an enforcement of other
obligation, liability or tax, while the member is on active duty and from
the date of release from active duty, or from the date of release from
active duty if application for relief is made after release, for a period
equal to any portion of the period of active duty and subject to payment of
the balance of the obligation plus interest during the stay period.

If
a court grants a stay under this rule, no fine or penalty shall accrue on the
obligation, liability, or tax during the stay.

Business and Trade Obligations

While a member is on active duty, a member’s assets not held in connection with
a trade or business, cannot be used to satisfy an obligation of a member’s trade
or business for which the member is personally liable.

A
court may modify this relief as justice and equity desire should the holder of
such a trade or business obligation apply to the court for relief.

INTEREST RATES

Any
obligation or liability incurred by a member, or by a member and the member’s
spouse jointly, before the member enters active duty shall not bear an interest
rate in excess of 6% per year during the period of active duty. An obligation or
liability will become subject to this interest rate limitation as of the date of
order to active duty, where the member provides the creditor with written notice
and a copy of the military orders, no later than 180 days after the date of
termination or release from active duty.

A
court may grant a creditor relief from the maximum interest rate only if the
court determines that the member’s ability to satisfy the obligation has not
been materially affected by virtue of military service.

The 6% per annum interest rate (includes
services charges, renewal charges, fees or any other charges except bona fide
insurance). The payments on the loan must be re-amortized to 6% so that the
payments are lowered (i.e. – the creditor may not accelerate the payment of
principal defeating the purpose of the act).

INSURANCE

Protection of Life Insurance Policy

If
a member makes an application, for protection under this rule, to an insurance
company and the Department of Veterans Affairs (VA), with regard to a life
insurance policy on the member’s life which:

is in force not less than 180
days before the member’s entry onto active duty;

provides that the insurer may
not decrease or restrict the amount of coverage, or require increase
premiums, if the member enters active duty; and,

which is accepted by the VA,
the policy, up to $250,000 (or an amount equal to the Servicemember’s Group
Life Insurance maximum) of coverage, shall not lapse or otherwise terminate
if premiums, or interest, or indebtedness on a premium is not paid after the
date on which the application for such protection is received by the VA for
up to two years after the member is released from active duty.

An
application to receive this protection must be made in writing by the member,
the member’s legal representative, or the beneficiary if the member is not in
the United States (including territories), and must:

include the signature of the
applicant;

identify the policy and the
insurer;

include an acknowledgement that
the member’s rights under the policy are subject to and modified by the
provisions of SCRA; and,

be sent to the insurance
company with a copy sent to the VA

Upon receipt of an application, the insurance company must send a report to the
VA for VA determination and the member and the insurance company must provide
additional information as required by the VA.

During the period of protection under this rule:

a dividend or other monetary
benefit may not be paid to the member nor may cash value, loan value,
withdrawal of dividend accumulation, unearned premiums, or other value be
available to the member without VA approval;

the premiums and interest are
guaranteed by the United States; and,

if a member dies or the policy
otherwise matures, the insurance company shall deduct the unpaid premiums
plus interest which accumulated during the protection period and report this
deduction to the VA.

Upon expiration of the period of protection under this rule:

if the cash surrender value of
a policy is less than the amount due to pay premiums and interest, the
policy shall terminate and the United States shall pay the insurer the
amount still owed; and,

the amount paid by the United
States is a debt payable by the member and may be collected by the United
States as authorized by law (usually an offset from military pay).

Assignment of Life Insurance Policy

If
a life insurance policy on the life of a member is assigned to secure payment of
an obligation before the member comes on active duty, the assignee may not
exercise any right or option obtained on the assignment while the member is on
active duty and within one year of release from or termination of active duty,
without a court order.

This rule does not apply:

to the insurance company in
connection with a loan on the insurance policy;

when the premiums on the policy
are due and unpaid;

upon the death of the insured;
or,

if the assignee receives
written consent from the member while he is on active duty or during the
year thereafter.

Where a court is petitioned for an order to allow exercise of a right or an
option under this rule, the court may refuse to grant the order if it determines
the ability of the member to comply with the terms of the obligation is
materially affected by military service.

A
person who knowingly takes action in contravention of this rule or attempts to
do so shall be fined up to $100,000 or imprisoned for up to one year.

Professional Liability Protection

A member who when ordered to active
duty:

was engaged in the business of
providing health-care, legal services, or other profession services (as
determined by DOD); and,

had in effect a professional
liability insurance policy,

may
make a written request to the insurance carrier, and the insurance company must
suspend the member’s coverage and must reinstate the coverage for at least the
same duration as the suspension if the member requests reinstatement within 30
days after the date of release from active duty.

During the period of suspension, the insurance carrier:

may not require that premiums
be paid for the policy;

shall refund any amount paid
for coverage for coverage for the period of such suspension (or the member
may elect to have such amount retained to be used upon reinstatement of the
policy);

shall not be liable with
respect to any claim based on conduct (or lack of conduct) which occurred
during the period of suspension; and,

does not need to suspend the
coverage for persons other than the member covered by the same policy and
can require others to pay premiums for their coverage during the period of
suspension.

Where a civil or administrative action for damages for professional negligence
or liability is commenced during the period of suspension of insurance coverage
and the action is based on an act or omission that occurred before the beginning
of the suspension and would be covered by the insurance, but for the suspension,
such action must be stayed until the end of the period of the suspension.

Health Insurance

Where a member makes an application within 120 days of being released from
active duty, an insurance company must reinstate health insurance coverage
without imposing any exclusions or waiting periods for the member or other
persons covered by the insurance under the member’s coverage if:

the health insurance was in
effect on the day before the member entered active duty;

the health insurance was
terminated while the member was on active duty; and,

the member is not entitled to
employer provided health insurance pursuant to USERRA

TAX RELATED PROVISIONS

Taxes on Property

No
property owned by a member or jointly by a member and the member’s dependants
can be sold to enforce the collection of a tax which became due before or during
the time a member is on active duty, on a member’s personal property or real
property occupied as a dwelling, or for professional, business, or agricultural
purposes by a member or a member’s dependents or employees while a member is on
active duty, without a court order and upon a determination by the court that
the military service does not materially affect the member’s ability to pay the
tax.

A
court may stay a proceeding to enforce collection of a tax or sale of the
property while the member is on active duty and up to 180 days after the release
from active duty.

When a member’s property is sold pursuant to a court order, a member shall have
the right to redeem or commence an action to redeem the property during the
period of active duty or within 180 days after release from active duty, unless
state law would provide a longer period in which case the state law applies.

Where a member does not pay a tax on property covered by this rule, the amount
of interest on the tax that can accrue on the unpaid amount until paid is 6% and
no additional penalty or interest shall be incurred by reason of non-payment.

Collection of Income Tax

Where a member notifies the Internal Revenue Service or state taxing authority
of entrance on active duty, the collection of income tax falling due before or
during the period of active duty shall be deferred for a period of not more than
180 days after the member’s release from active duty, where the member’s ability
to pay the tax is materially affected by military service.

No
interest or penalty shall accrue during the period of deferral and the statute
of limitations on collection shall be suspended during the period of active duty
and for 270 days after release from active duty.

A
member cannot receive a deferral under this rule for federal social security and
medicare taxes.

Residence

A
member shall neither lose nor acquire a residence or domicile for voting or tax
purposes based on his absence or presence in a tax jurisdiction pursuant to
military orders.

Military pay is not considered income from services performed or from sources
within a tax jurisdiction if the member is not already a resident or domicile of
the jurisdiction in which he located pursuant to military orders.

The
personal property of a member, not used for business purposes, shall not be
deemed to be located in a tax jurisdiction in which the member is present
pursuant to military orders unless that tax jurisdiction is already the member’s
domicile or residence.

A
tax jurisdiction may not use the military pay of a nonresident member to
increase the tax liability imposed on other income earned by the resident member
or the member’s spouse subject to the tax jurisdiction.

LAND RIGHTS

Any
requirement to be present in, make improvement upon, expend resources on, or
complete work on or in connection with:

public land owned by the member
prior to entry onto active duty;

desert land entry made or held
under the desert-land laws; and,

mining claims;
shall be suspended and no rights shall be subject to forfeiture while a
member is on active duty.

A
member who has a permit or license for use of public lands including mining and
mineral leasing may suspend the permit or license during a period of active duty
and for 180 days thereafter.

In
order to obtain these protections, notification indicating the member is on
active duty and requesting the protection, must be made:

for mineral permits and leases,
to the Secretary of the Interior within 180 of entry onto active duty;

for mining claims, to the
location where the notice or certificate is recorded, before the end of the
assessment year in which the member enters active duty and 60 days
thereafter; and,

for desert-land entry, in the
land office of the district where the claim is situated within 180 days of
entry onto active duty.

These protections do not affect the right of a member to take action concerning
any rights, permits, or licenses listed above while on active duty.

Any
affidavits or submissions of proof required by the laws with regard to the
rights, permits, or licenses listed above may be made by a member on active duty
before an officer authorized to provided notary services under 10 U.S.C. § 1044a
(legal assistance attorneys and some paralegals).

POWER OF ATTORNEY

A
power of attorney executed by member while on active duty, or before entering
active duty if the member already had orders or had been informed such orders
were forthcoming, which designates a relative as the attorney in fact for
specified or all purposes and which expires by its terms after the member enters
a missing status (as defined by 37 U.S.C. § 551(2)) shall be automatically
extended for the period the member is in missing status, unless the power of
attorney states that the power granted expires even if the member is in a
missing status.

WAIVER

A
member may waive any of the rights and protections provided by SCRA by a written
agreement executed during or after the member’s period of active duty.

INAPPROPRIATE USE OF ACT

If
a court or administrative body determines in any civil proceeding that any
interest, property, or right has been transferred or acquired with the intent to
delay enforcement of an obligation, liability, or right by taking advantage of
SCRA, the court or administrative body shall enter a judgment or order to
enforce the obligation, liability, or right to prevent such inappropriate use of
SCRA.

CREDIT RATING PROTECTION

Claiming rights under SCRA cannot be the basis for:

A determination by lender that
the member is unable to pay

A denial or revocation of
credit

A change in the terms of an
existing credit arrangement

A refusal to grant credit to
the member

An adverse credit report

A refusal by an insurer to
insure the member

CROSSWALK OF SCRA SECTIONS TO FORMER SSCRA SECTIONS

SCRA §

SSCRA

50 U.S.C. App. §

Section Heading

1

--

Restatement of Act

1

501

Short Title; Table of Contents

2

510

Purpose

TITLE I – GENERAL PROVISIONS

101

511

Definitions

102

512

Jurisdiction and applicability of Act

103

513

Protection of persons secondarily liable

104

514/572

Extension of protections to citizens serving with
allied forces

105

515

Notification of benefits

106

516

Extension of rights and protections to Reserves
ordered to report for military service and to persons ordered to report
for induction

107

517

Waiver of rights pursuant to written agreement

108

518

Exercise of rights under Act not to affect
certain future financial transactions

109

--

Legal representatives

TITLE II – GENERAL RELIEF

201

520

Procedure of servicemembers against default
judgments

202

521

Stay of proceedings when servicemember has notice

203

522

Fines and penalties under contracts

204

523

Stay or vacation of execution of judgments,
attachments, and garnishments

205

524

Duration and term of stay; codefendants not in
service

206

525

Statute of limitations

207

526

Maximum rate of interest on debts incurred before
military service

--

527

Limitations
prescribed by internal revenue laws as affected by period of service

TITLE V -- TAXES AND PUBLIC LANDS

Homestead entries and settlement claims; service
as equivalent to residence and cultivation

--

563

Death or incapacity during or resulting from
service as affecting rights; perfection of rights

503

564

Desert-land entries

504

565

Mining claims

505

566

Mineral permits and leases

506

567

Perfection of defense rights

--

568

Irrigation rights; residence requirements
suspended

507

569

Distribution of information concerning benefits
of title

--

570

Homestead entrymen permitted to leave entries to
perform farm labor

508

571

Land rights of servicemembers

509

--

Regulations

510

573

Income Taxes

511

574

Residence for tax purposes

TITLE VI – ADMINISTRATIVE REMEDIES

601

580

Inappropriate use of Act

602

581

Certificates of service; persons reported missing

603

582

Interlocutory orders

--

583

Separability

--

584

Termination date

TITLE VII – FURTHER RELIEF

701

590

Anticipatory relief

702

591

Power of Attorney

703

592

Professional liability protection

704

593

Health insurance reinstatement

705

--

Guarantee of residency for military personnel

706

--

Business or trade obligations

TABLE OF SIGNIFICANT CHANGES AND
ADDITIONS

SCRA §

SSCRA

50 U.S.C. App. §

Section Heading

Change

101

511

Definitions

ADDED definition of “dependent” to include the
servicemember’s spouse, child, or individual receiving more than 50% of
support from the servicemember.

101

511

Definitions

MODIFIED the definition of “court” to include
administrative agencies.

108

518

Exercise of Rights
Under Act Not to Affect Certain Future Financial Transactions

ADDED protection against credit reporting agency
identifying a servicemember as an member of the National Guard or a
reserve component as a result of exercising SCRA rights.

108

518

Exercise of Rights Under Act Not to Affect
Certain Future Financial Transactions

ADDED protection from a change in terms offered
or conditions required for the issuance of insurance as a result of
exercising SCRA rights.

201

521

Protection of Servicemembers Against Default
Judgments

MODIFIED standard for granting a stay of
proceedings when the military servicemember-defendant has not received
notice. If the defendant is in military service and has not received
notice of the pending suit, the Court must grant a stay of proceedings
for a minimum of 90 days. Formerly, the Court could but was not required
to grant a stay.

201(g)

520

Protection of Servicemembers Against Default
Judgments

EXTENDED to 60 days (formerly 30 days) time
following termination of service in which a default judgment may be
challenged. If a default judgment is entered during military service or
within 60 days thereafter, the servicemember may request the court
reopen the judgment.

202(a)

521

Stay of Proceedings When Servicemember Has Notice

EXTENDED to 90 days (formerly 60 days) time
following termination of service in which a military
servicemember-defendant who has received notice may request a stay of
proceedings. Court must grant a stay of at least 90 days provided
certain conditions are met.

204(b)

523

Stay of Vacation of Execution of Judgments,
Attachments, and Garnishments

EXTENDED to 90 days (formerly 60 days) time
following termination of service in which a military servicemember may
request a stay of execution of a judgment, order, attachment, or
garnishment.

207(a)

526

Maximum Rate of Interest on Debts Incurred Before
Military Service

CLARIFIED interest in excess of 6% on
affected debts is forgiven, disallowed acceleration of principal, and
created procedures for notifying creditors.

301(a)

530

Evictions and Distress

INCREASED monthly rental limit for eviction
protection from $1,200 to $2,400, indexed this rate for inflation
($2,465 for year 2004), and added provision granting relief for premises
contracted but not yet occupied. Formerly, only premises that were
occupied as a residence qualified.

305(b)

534

Termination of Residential or Motor Vehicle
Leases

ADDED provision allowing termination of
residential leases entered into while in military service upon receipt
of permanent change of station or deployment orders for a period of 90
days or more. Formerly only leases executed prior to entering military
service were covered.

305(b)

534

Termination of Residential or Motor Vehicle
Leases

ADDED provision allowing termination of motor
vehicle leases by an individual ordered to military service for more
than 180 days or by a military servicemember upon receipt of orders for
a permanent change of station outside the continental United States or
to deploy for 180 days or more.

402(c)

541

Insurance Rights and Protections

CHANGED maximum amount of insurance protected
from $10,000 to $250,000.

511(d)

574

Residence for Tax Purposes

ADDED provision preventing states from including
military income to determine state marginal income tax rate imposed on
non-military income.

703(a)

592

Professional Liability Protection

ADDED legal services to list of
services eligible for suspension of coverage. Formerly, this provision
listed “health-care services or other services determined by the
Secretary of Defense to be professional services” and mobilization
orders had to specify that legal services were considered professional
services.